Comment by raw_anon_1111
19 hours ago
So every company that is not immediately selling enough to cover its fixed costs and its variable cost should be illegal? Every company and every new initiative must be profitable from day one in your world?
19 hours ago
So every company that is not immediately selling enough to cover its fixed costs and its variable cost should be illegal? Every company and every new initiative must be profitable from day one in your world?
If it's a large company, that can dominate the market by absorbing the losses until competition disappears?
Arguably, yes.
So that means for instance it was illegal for Netflix to get into the streaming business or for Apple to start selling iPods because neither could do it profitably from day one?
Should Microsoft have not been allowed to sell operating systems and still survive from selling BASIC interpreters? Should Nintendo have not been allowed to sell video games and still be selling playing cards?
Every company that is interested in survival takes profits from an existing business to start a new one,
So it would be illegal for Google but legal for Anthropic?
What about OpenAI?
The question is over what timescale and volume.
Toyota shouldn't have to sell their first new car off the line for 100 million to pay for the entire manufacturing line.
Your first SAAS customer shouldn't have to pay back all your costs.
Can you plan to break even after your first month of sales? first year? 10 years?
This isn't typically an area where laws and regulations can work effectively because who knows until after the fact? Taxation laws do deal with this from a different perspective, for example most jurisdictions won't let a company take losses every year forever, as they judge the intent of a corporation. Even this is incredibly complex so I'm not sure how your idea would work, even the term "break even" doesn't have a clear definition, ex: do Capital assets still depreciate the same in the AI world? When did Amazon start to break even? What if they didn't deliver shopping on top of aws? Was that an unfair subsidization?
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So we are going to pass a law that any new company initiative must be profitable in $x years? Are we going to outlaw loss leaders?